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Samsung to invest big in memory chips and OLED displays to stay ahead of competition
Samsung is the largest manufacturer of memory chips in the world. In hopes of retaining the number one spot in the future, the company has announced its plans to invest at least $18.6 billion in its home country to boost production of memory chips. Part of the investment will also be used for the production of its next-generation OLED displays for smartphones.
Samsung’s plan, which promises to create almost half a million jobs by 2021, is to put 14.4 trillion won ($12.5 billion) into its new NAND factory located in Pyeongtaek, South Korea. The investment does make sense based on the fact that demand for these memory chips has been rising. With high demand and supply shortages, prices have been increasing recently, which is why Samsung is expected to post record profits this year.
Some analysts claim that the additional production capacity across the industry just might cause a slight oversupply in early 2018, although prices aren’t expected to come down because the demand is so strong.
There’s no chance of major oversupply issues, and I think Samsung is investing so much because it’s convinced that won’t happen. — Choi Do-yeon, Shinhan Investment analyst
As already mentioned above, Samsung Display also plans to invest big in its next-generation smartphone displays. The company said that it will spend 1 trillion won ($870 million) on a new OLED display complex in South Korea. The demand for these panels is extremely high at the moment, with quite a few companies fearing that they won’t be able to get their hands on enough OLED displays they need to produce their smartphones. That’s why Google has already offered to invest in LG’s display division, as might Apple according to the latest report.
Samsung Display is currently by far the biggest player when it comes to OLED smartphone displays with a market share of over 90 percent. With companies like LG, as well as quite a few others increasing their production capacity, it seems the tech giant is more than willing to open up its wallet and spend big in order to stay ahead of the competition.